UN Identifies Corruption, Insecurity as Obstacles to Doing Business in Nigeria

Beyond harsh regulatory frameworks, infrastructure deficit, and bureaucratic bottlenecks, Country Representative for United Nations Office on Drugs and Crime (UNODC), Dr. Oliver Stolpe, has identified corruption and insecurity as major obstacles to doing business in Nigeria. Stolpe stated this yesterday in Lagos during the “LCCI Stakeholders’ Engagement Session on Ease of Doing Business (EoDB).”

The UNODC country representative pointed out that corruption and insecurity caused additional $500 million cost to liner services that passed through the Gulf of Guinea, especially within the Nigerian and Sao Tome and Principe corridors.

He disclosed that a survey by UNODC and National Bureau of Statistics (NBS) in 2019 revealed that N675 billion was recorded in 2019 as petty bribes paid by Nigerians, adding that half of this sum was collected on Nigerian roads, which was an additional cost to operators in the transport and logistics sector of the economy.

According to Stolpe, “Insecurity and corruption are factors that affect the ease of ease of doing business in Nigeria and foreign direct investment.

“Now, the issue of crime and corruption from business perspective is first and foremost simply an additional cost that you have to calculate and that makes it high because unpredictable events are very hard to calculate.

“When we look specifically at the shipping industry it is estimated that the shipping industry at the Gulf of Guinea, which is Principe and Nigeria corridor, incurs an additional $500 million due to insecurity in the Gulf of Guinea due to increased freight rate and additional security and staff related costs that shipping companies incur in order to secure their vessels.”

Although insecurity incidence in the Gulf of Guinea had significantly reduced, Stolpe said “as at last year I was still hearing that the insurance companies have not reduced the rates for people who are doing shipping in the Gulf of Guinea because of the persisting fear of attacks since many of these things have to do with fear.

“Moving on to the issue of bribery, the National Bureau of Statistics and our office conducted the second national corruption survey in 2019.

“Here we were measuring household survey and were looking predominantly at what is referred to as ‘petty’ corruption that involved N675 billion in 2019. About half of those bribes were collected on the roads. That was a huge addition to operators in transport industry.”